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G.R. No. 156296 : Dennis Q. Martel v. Salvador E. Kerr

G.R. No. 156296 : Dennis Q. Martel v. Salvador E. Kerr

PHILIPPINE SUPREME COURT DECISIONS

FIRST DIVISION

G.R. No. 156296 : November 12, 2012

DENNIS Q. MORTEL, Petitioner, v. SALVADOR E. KERR, Respondent.

D E C I S I O N

BERSAMIN, J.:

When the incompetence, ignorance or inexperience of counsel is so great and the resulting error is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the client deserves another chance to present his case. Hence, the litigation may be reopened for that purpose.

The client seeks the reversal of the resolution dated September 5, 2002,1ςrνll whereby the Court of Appeals (CA) denied his petition for review on certiorari from the order of the Regional Trial Court, Branch 72, in Olongapo City (RTC) issued in Civil Case No. 279-0-2000. He pleads that the rules of procedure should be liberally construed in his case, and that he should not be bound by the negligence and errors of his previous counsels that deprived him of his property without being afforded his day in court.

Antecedents

On July 19, 2000, respondent Salvador E. Kerr (Kerr) instituted a complaint for foreclosure of mortgage, docketed as Civil Case No. 279-0-2000, against Dennis Q. Mortel (Mortel), who duly filed an answer on August 11, 2000 through Atty. Leonuel N. Mas (Atty. Mas) of the Public Attorneys Office. The pre-trial was re-set four times for various reasons, but on the fifth setting on December 7, 2000, Mortel and Atty. Mas were not around when the case was called. On motion of Kerrs counsel, the RTC declared Mortel as in default and allowed Kerr to present evidence ex parte.

On December 28, 2000, Atty. Eugenio S. Tumulak (Atty. Tumulak) filed a notice of appearance in behalf of Mortel, but the RTC did not act on the notice of appearance.

On February 28, 2001, the RTC rendered judgment in favor of Kerr,2ςrνll disposing as follows:chanroblesvirtuallawlibrary

WHEREFORE, judgment is hereby rendered ordering the defendant Dennis Q. Mortel to pay the plaintiff Salvador E. Kerr within a period of not more than ninety (90) days from receipt of this Decision the sum of P130,000.00 plus interest of P6,000.00 per month from November 1999 until the whole obligation has been fully paid and the further sum of P20,000.00 by way of attorneys fees and the costs.

In default of such payment, let the house and lot described in the Deed of Real Estate Mortgage (Exhibits "A-1" and "A-2") in the plaintiffs complaint be sold at public auction and the proceeds thereof applied to the aforesaid obligation and the costs of this suit.ςrαlαωlιbrαr

SO ORDERED.

On March 22, 2001, Mortel, through Atty. Leopoldo C. Lacambra, Jr. (Atty. Lacambra), filed a motion for new trial.3ςrνll

On March 23, 2001, Atty. Mas filed his withdrawal of appearance.4ςrνll

On April 5, 2001, the RTC denied Mortels motion for new trial, noting that Atty. Mas withdrawal as counsel of Mortel had been filed only on March 23, 2001 and approved by the RTC on March 26, 2001. It held that considering that the records of the case showed that Atty. Mas had received the decision on March 1, 2001, the motion for new trial had been filed out of time on March 20, 2001.5ςrνll

On May 4, 2001, Mortel, this time through Atty. Tumulak, filed a verified petition for relief from judgment under Rule 38 of the Rules of Court.6ςrνll

On August 20, 2001, the RTC denied the verified petition for relief from judgment on the ground that the petition for relief had been filed beyond the reglementary period of 60 days based on a reckoning of the start of the period from March 1, 2001, the date when Atty. Mas received the notice and copy of the Order,7ςrνll to wit:chanroblesvirtuallawlibrary

x x x. Now, the petition for relief is again filed by a counsel whose Notice of Appearance has not been acted upon. Defendants counsel on record received the Decision on March 1, 2001, which is the reckoning point to count the mandatory sixty (60) days in order that a Petition for

Relief can be filed. It is elementary that notice to counsel is notice to party (People v. Midtomod, 283 SCRA 395). Hence, from March 1, 2001 up to May 4, 2001 the filing of the Petition for Relief is already sixty-four (64) days which is four days beyond the period within which to file the same. The defendants Counsel now reckoned the period from the time the client received the said Decision.8ςrνll

On November 14, 2001, Mortel moved for the reconsideration of the denial of his petition for relief from judgment.9ςrνll

On December 6, 2001, the RTC granted the withdrawal of Atty. Lacambra and Atty. Mas as counsels for Mortel, and finally recognized Atty. Tumulak as the only counsel.10ςrνll

On January 16, 2002, the RTC treated Mortels motion for reconsideration as a mere scrap of paper and ordered it stricken from the records for failure of the counsel to serve a notice of hearing with the motion for reconsideration.11ςrνll

Mortel filed an urgent motion for reconsideration vis-vis the RTCs order of January 16, 2002.12ςrνll

On June 17, 2002, the RTC denied the urgent motion for reconsideration for being a second motion for reconsideration and for being moot and academic; and granted Kerrs ex parte motion for the issuance of a writ of possession.13ςrνll

Subsequently, the RTC issued a writ of execution on June 20, 2002,14ςrνll and Kerr was then placed in possession of the property.

On August 26, 2002, Mortel, through Atty. Tumulak, filed in the CA a petition for review on certiorari with prayer for the issuance of a restraining order.15ςrνll

On September 5, 2002, the CA issued a resolution dismissing Mortels petition for review for failing to state the specific material dates showing that the petition had been filed within the reglementary period, in violation of Section 6(d), Rule 43 of the Rules of Court. It observed that Mortel thereby resorted to the wrong remedy considering that he was assailing the propriety of the RTCs order declaring him in default, against which the proper remedy was a petition for certiorari.16ςrνll

On October 14, 2002, Mortel sought the reconsideration of the denial of his petition for review.17ςrνll

On November 18, 2002, the CA denied Mortels motion for reconsideration for lack of merit because the defects of the petition for review were not corrected, and for availing himself of the remedy of petition for review when he should have filed a petition for certiorari instead.18ςrνll

Atty. Tumulak received the denial by the CA on December 5, 2002.19ςrνll

Instead of appealing via petition for review on certiorari in the Supreme Court (SC), Mortel, through Atty. Tumulak, filed in the CA on December 20, 2002 an urgent motion for extension of time to appeal to the SC.20ςrνll

On December 23, 2002, Mortel, by himself, sought an extension of time to file a petition for review on certiorari.21ςrνll

On January 27, 2003, the Court granted Mortels motion for extension with a warning that no further extension would be given.22ςrνll

On January 22, 2003, Mortel, still by himself, filed his petition for review on certiorari assailing the CAs dismissal of his petition for review on certiorari.

Issues

Mortel contends that:chanroblesvirtuallawlibrary

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS ERRED IN DENYING THE MOTION FOR RECONSIDERATION DATED SEPTEMBER 28, 2002 FROM THE RESOLUTION DATED SEPTEMBER 5, 2002 DISMISSING THE PETITION FOR REVIEW FILED BY THE PETITIONER.23ςrνll

Mortel prays that the Rules of Court be liberally interpreted in his favor to allow his petition for review on certiorari despite the various lapses of his counsels resulting in the loss of his opportunity to assail the resolutions of the RTC.

On the other hand, Kerr insists that the CA correctly dismissed the petition because the errors of his former counsels bound Mortel.24ςrνll

Accordingly, the issues to be resolved are the following:chanroblesvirtuallawlibrary

1. Whether or not the negligence of Mortels previous counsels should bind him; and

2. Whether or not Mortel was deprived of his property without due process of law.

Ruling

The petition, being meritorious, is granted.

The CA found that despite the opportunity given to him to do so, Mortels counsel erred in failing to state the specific material dates required by Section 6(d) of Rule 43, Rules of Court to show that the petition for review was filed within the reglementary period; and that Mortel resorted to the wrong remedy by filing a petition for review instead of a petition for certiorari because he was questioning the propriety of the RTCs order declaring him as in default.25ςrνll

Mortels counsel committed another error when he filed his urgent motion for extension of time to file an appeal in the CA, instead of in the SC, resulting in not stopping the running of the period of appeal and in thereby rendering the Resolution of the CA final.

As a rule, a client is bound by his counsels conduct, negligence and mistake in handling a case.26ςrνll To allow a client to disown his counsels conduct would render proceedings indefinite, tentative, and subject to reopening by the mere subterfuge of replacing counsel.27ςrνll

But the rule admits of exceptions. In several rulings, the Court held the client not concluded by the negligence, incompetence or mistake of the counsel. For instance, in Suarez v. Court of Appeals,28ςrνll the Court set aside the judgment and mandated the trial court to reopen the case for the reception of the evidence for the defense after finding that the negligence of the therein petitioners counsel had deprived her of the right to present and prove her defense. Also, in Legarda v. Court of Appeals,29ςrνll the Court ordered restored to the petitioner her property that had been sold at public auction in satisfaction of a default judgment resulting from the failure of her counsel to file an answer and from counsels lack of vigilance in protecting her interests in subsequent proceedings before the trial court and the CA. Lastly, in Amil v. Court of Appeals,30ςrνll the Court declared that an exception to the rule that a client is bound by the mistakes of his counsel is when the negligence of the counsel is so gross that the client was deprived of his day in court, thereby also depriving the client of his property without due process of law.

The relevant question becomes, therefore, whether the negligence of Mortels counsels was so gross and palpable as to deprive him of his property without due process of law.

We hold that it was.

Mortel did not have his day in court, because he was unable to submit his evidence to controvert the claim of Kerr about his contractual default after the RTC declared Mortel as in default due to his counsels failure to appear at the fifth setting of the pre-trial. Yet, he explained that he was only late because he arrived in court a few minutes after the case had been called. His explanation appears plausible, considering that he had unfailingly appeared in court in the four previous settings of the pre-trial. In view of the fact that it was his first time not to be present when the case was called at the fifth setting of the pre-trial, the RTC could have allowed a second or a third call instead of immediately granting his adverse partys motion to declare him as in default. In Leyte v. Cusi,31ςrνll the Court has admonished against precipitate orders of default because such orders have the effect of denying a litigant the chance to be heard. Indeed, we have reminded trial courts that although there are instances when a party may be properly defaulted, such instances should be the exception rather than the rule and should be allowed only in clear cases of a litigants obstinate refusal or inordinate neglect to comply with the orders of the court. Without such a showing, the litigant must be given every reasonable opportunity to present his side and to refute the evidence of the adverse party in deference to due process of law.32ςrνll

Nevertheless, the negligence that actually warrants the undoing of the RTCs decision was serial on the part of Atty. Mas, the RTC and Atty. Tumulak.

The primary negligence occurred on the part of Atty. Mas. He did not appear at the pre-trial despite being notified of it. What is very disturbing is that he was then an attorney in the Public Attorneys Office in Olongapo City whose place of work was located in the same Hall of Justice of Olongapo City where the RTC was then sitting. Moreover, he did not offer any explanation for his non-appearance at the pre-trial despite notice to him; nor did he take the necessary move to protect the interest of Mortel upon learning that Mortel had been declared as in default by the RTC. His non-appearance despite notice and his subsequent inaction for his clients cause manifested his indifference and lack of professionalism, and is difficult to comprehend considering that he was the primary cause why Mortel was declared as in default by the RTC.

The RTC was equally responsible for Mortels dire plight. It appears that Mortel engaged Atty. Tumulak to take over as counsel from Atty. Mas. Atty. Tumulak notified the RTC of his appearance for Mortel on December 28, 2000. The RTC could have easily noted and acted on Atty. Tumulaks entry of appearance for Mortel, or, if the RTC still desired to require the submission of Atty. Mas withdrawal as counsel, to direct such withdrawal to be first submitted, especially after Atty. Mas filed his withdrawal of appearance on March 23, 2001. But the RTC uncharacteristically did not take either of such actions on the notice of appearance but proceeded to render its judgment on the merits, a copy of which it dispatched to Atty. Mas (who received it on March 1, 2001) and to Mortel himself (who received it on March 7, 2001). In effect, the RTC disregarded Atty. Tumulaks notice of his substitution of Atty. Mas as counsel of Mortel. The disregard continued for nearly a year, and the RTC finally recognized Atty. Tumulak as the only counsel of Mortel on December 6, 2001. The reason for the RTCs disregard of and long-delayed action upon a matter as essential to the client and to the administration of justice in the case as the substitution of counsel is not easy to appreciate, especially because the RTC tendered no good reason for it.

With Atty. Tumulak left out and remaining unaware of the developments in the case because of the RTCs inaction on his notice of appearance, Mortel, upon receipt of the decision and feeling abandoned again by Atty. Tumulak, his new counsel, engaged Atty. Lacambra to collaborate as his counsel. Atty. Lacambra filed on March 20, 2001 a motion for new trial. Counting from the time when Mortel received the copy of the decision on March 7, 2001, Mortel probably thought that he had filed the motion for new trial within the required period. However, the RTC considered March 1, 2001 as the reckoning date, being the date when Atty. Mas received the notice of the decision, and ruled that Mortels motion for new trial was already filed beyond the prescribed period. That action of the RTC was not prudent and circumspect, considering that the records of the case already contained since December 28, 2000 the entry of appearance of Atty. Tumulak as replacement of Atty. Mas as Mortels counsel. The RTC should have at least informed either Mortel or Atty. Tumulak or both of them that it was either allowing or disallowing Atty. Tumulaks entry of appearance in order to enable Mortel to seasonably clarify his dire situation and, if necessary, even to rectify it. That prudential and circumspect approach would have been easy for the RTC to take because the RTC became all too aware of the neglect of Atty. Mas in protecting the interest of Mortel following the declaration of Mortel as in default. In addition, the RTC could have reckoned the period for Mortel to bring the motion for new trial from March 7, 2001, the date when Mortel received a copy of the decision the RTC sent to him directly, instead of March 1, 2001, the date when Atty. Mas received the copy of the decision, considering all the indications about Atty. Mas having neglected the interest of Mortel.

Atty. Tumulak shared the blame for the predicament of Mortel through his own series of errors that mirrored an ignorance of the rules of procedure. There is no question that the errors deprived Mortel of the timely means to successfully undo the adverse decision rendered by the RTC. Atty. Tumulaks first error was in filing a motion for reconsideration vis-vis the RTCs denial of the petition for relief from judgment without including a proper notice of hearing. He next filed a motion for reconsideration vis-vis the RTCs denial of his first motion for reconsideration, which the RTC then denied on the ground of its being already a prohibited second motion for reconsideration. This was another fatal error. The series of errors did not end there, for Atty. Tumulak opted to file in the CA a petition for review on certiorari instead of a petition for certiorari, which was the appropriate remedy due to his alleging grave abuse of discretion on the part of the RTC. This was one more error. The ultimate error was not any less serious, because Atty. Tumulak filed in the CA instead of in this Court the motion for extension of time to appeal the CAs November 18, 2002 denial of Mortels motion for reconsideration. Atty. Tumulaks moves in behalf of Mortel, no matter how well intentioned, were contrary to the pertinent rules of procedure and worked against the clients interest.

The negligence and mistakes committed by his several counsels were so gross and palpable that they denied due process to Mortel and could have cost him his valuable asset. They thereby prevented him from presenting his side, which was potentially highly unfair and unjust to him on account of his defense being plausible and seemingly meritorious. He stated that he had already paid the principal of the loan and the interest, submitting in support of his statement a receipt for P200,000.00 that Kerr had allegedly signed. He also stated that he had actually overpaid in view of his arrangement for Kerr to withdraw P6,000.00 each month from Mortels bank account as payment of the interest, a statement that he would confirm in court through the testimony of a bank representative.33ςrνll

We held in Apex Mining, Inc. v. Court of Appeals34ςrνll that when the incompetence, ignorance or inexperience of counsel is so great and the result is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the client deserves another chance to present his case; hence, the litigation may be reopened for that purpose. Also, when an unsuccessful party has been prevented from fully and fairly presenting his case because of his attorneys professional delinquency or infidelity the litigation may be reopened to allow the party to present his side. Lastly, where counsel is guilty of gross ignorance, negligence and dereliction of duty, which resulted in the clients being held liable for damages in a damage suit, the client is deprived of his day in court and the judgment may be set aside on such ground.35ςrνll

Court litigation is primarily a search for truth, and a liberal interpretation of the rules that gives to both parties the fullest opportunity to adduce proof is the best way to ferret out such truth.36ςrνll Thus, a court may suspend its own rules or except a case from them in order to serve the ends of justice; or, it may altogether disregard the rules in a proper case.37ςrνll To cling to the general rule of having the ignorance, negligence and dereliction of duty of the counsel bind the client is only to condone rather than to rectify a serious injustice to a party whose only fault was to repose his faith and entrust his cause to his counsel.38ςrνll

WHEREFORE, the Court REVERSES the resolution promulgated on September 5, 2002; ANNULS and SETS ASIDE the decision rendered in Civil Case No. 279-0-2000 on February 28, 2001 by the Regional Trial Court, Branch 72, in Olongapo City; and RE-OPENS Civil Case No. 279-0-2000 for the reception of evidence for the petitioner as the defendant.

Costs of suit to be paid by the respondent.ςrαlαωlιbrαr

SO ORDERED.

Endnotes:


1ςrνll Rollo. pp. 13-14; penned by Associate Justice Sergio L. Pestafio (retired/deceased), and concurred in by Associate Justice Delilah Vidallon-Magtolis (retired) and Associate Justice Josefina Guevarra-Salonga (retired)

2ςrνll Records, pp. 72-A-73.

3ςrνll Id. at 78-82.

4ςrνll Id. at 88.

5ςrνll Id. at 95.

6ςrνll Id. at 97-107.

7ςrνll Id. at 125-126.

8ςrνll Id. at 125.

9ςrνll Id. at 133-134.

10ςrνll Id. at 143.

11ςrνll Id. at 159.

12ςrνll Id. at 168-175.

13ςrνll Id. at 181-182.

14ςrνll Id. at 184-185.

15ςrνll CA rollo, pp. 2-15.

16ςrνll Id. at 95-96.

17ςrνll Id. at 97-101.

18ςrνll Id. at 110.

19ςrνll Id. at 108-109.

20ςrνll Rollo, pp. 9-11.

21ςrνll Id. at 3-7.

22ςrνll Id. at 34.

23ςrνll Id. at 41.

24ςrνll Id. at 70.

25ςrνll CA Rollo, pp. 95-96.

26ςrνll Saint Louis University v. Cordero, G.R. No. 144118, July 21, 2004, 434 SCRA 575, 584.

27ςrνll Gomez v. Montalban, G.R. No. 174414, March 14, 2008, 548 SCRA 693, 708.

28ςrνll G.R. No. 91133, March 22, 1993, 220 SCRA 274.

29ςrνll G.R. No. 94457, March 18, 1991, 195 SCRA 418.

30ςrνll G.R. No. 125272, October 7, 1999, 316 SCRA 317.

31ςrνll G.R. No. L-31974, July 31, 1987, 152 SCRA 496.

32ςrνll Id. at 498-499.

33ςrνll CA Rollo, pp. 38-39.

34ςrνll G.R. No. 133750, November 29, 1999, 319 SCRA 456.

35ςrνll Id. at 468.

36ςrνll Go v. Tan, G.R. No. 130330, September 26, 2003, 412 SCRA 123, 129-130.

37ςrνll People v. Del Mundo, G.R. Nos. 119964-69. September 20, 1996, 262 SCRA 266.

38ςrνll Apex Mining, Inc. v. Court of Appeals, supra note 35 at 468.

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